A husband and wife ran a concrete repair and restoration business in Illinois for years, the kind of company that fixes foundations, driveways, and structural concrete for homeowners and contractors. Like a lot of small trade businesses, their trouble with the IRS didn’t start with one bad year. It built up slowly, on both sides of the ledger, until they owed money personally and the business owed money too. By the time PFGTAX got involved, the case had been assigned to a revenue officer, which meant the pressure was no longer coming from form letters. It was coming from a person with the authority to act.

How it started

Running a small construction trade business means income swings hard with the seasons. Concrete work slows in the winter and picks up in spring, and a rough stretch of a few slow months can mean choosing between paying a supplier, making payroll, or sending a tax deposit to the IRS. Most owners choose to keep the doors open and figure the tax bill will get sorted out later. A missed deposit here, a late personal return there, and a couple of years later the balance has grown with penalties and interest attached to both the business and the owners personally.

In this case, both the couple’s individual tax situation and the business’s tax situation were behind at the same time, a common but harder pattern to untangle since the IRS treats a person and their corporation as two separate taxpayers even when the same people run both from the same kitchen table.

The pressure from the IRS

Once a case moves past automated notices and gets assigned to a revenue officer, the taxpayer is dealing with someone who has real tools available. A revenue officer can demand a full financial disclosure, file a lien against property, or move toward levying a bank account or wages if nothing gets resolved. There’s also less patience for silence. Revenue officers work a caseload and expect a response.

For this couple, that meant two open fronts at once. The revenue officer working the case was looking at both the personal balance and the separate business balance, and needed a resolution proposal for each one before either would move forward.

What we did

PFGTAX represented the couple on both matters at once, which is standard practice when a husband and wife also own the business behind their tax debt. We gathered the financial information the revenue officer needed, built a proposal for a personal installment agreement and a separate proposal for the business, and submitted both formally rather than letting the IRS set payments on its own terms.

An installment agreement, in plain terms, is a formal payment plan with the IRS. Instead of the IRS trying to collect everything at once through a levy or lien enforcement, the taxpayer agrees to a fixed monthly payment, and as long as they keep making it and stay current on future filings, the IRS holds off on aggressive collection. Structuring one takes real financial documentation, since the IRS wants a payment that reflects what a household or business can actually afford without pushing them back into default a few months later.

The outcome

The revenue officer approved both agreements the same week. The personal installment agreement was set at $300 a month by direct debit, starting in late March 2020. The business installment agreement was approved separately at $2,500 a month, also by direct debit, starting in late April 2020. Both came with a one-time $107 setup fee applied to the first payment, which is standard for a direct debit agreement.

Because both agreements were structured through automatic direct debit, the couple didn’t have to remember to mail a check every month, and the IRS had less reason to reopen either case as long as payments kept clearing and future returns were filed on time. That combination, current filings plus a reliable payment history, is what eventually lets a case move toward being closed out entirely.

Why it matters

This case is a good example of why it pays to treat a personal tax problem and a business tax problem as two connected but separate negotiations, not one tangled mess. Trying to solve both with a single conversation tends to slow everything down, because the IRS evaluates a person’s ability to pay differently than it evaluates a company’s. Splitting the two proposals, backed by real documentation for each, is what let this resolve in weeks rather than dragging on for a year while the balance kept growing.

For any small business owner reading this and recognizing their own situation, the lesson isn’t complicated. The IRS is more willing to work with a taxpayer who comes to the table with a real proposal and current filings than one who goes quiet and waits for a letter to escalate.

Results depend on each taxpayer’s specific facts and financial situation. PFGTAX does not guarantee any particular outcome or reduction in tax debt.

Frequently asked questions

What is an IRS installment agreement, and how is it different from just ignoring the bill?

An installment agreement is a formal, IRS approved plan to pay a tax debt off in monthly payments instead of all at once. It’s authorized under IRC 6159 and governed internally by IRM 5.14. Ignoring a balance doesn’t stop it from growing, and it leaves the IRS free to use levies or liens. A formal agreement puts a stop to that as long as the taxpayer keeps up their end.

Can a business and its owners have separate installment agreements at the same time?

Yes. The IRS treats an individual and a corporation as separate taxpayers with separate accounts, even when the same people run both. It’s common for a small business owner to need one agreement for personal taxes and a completely separate one for the business, each with its own monthly amount based on what that specific taxpayer can afford.

Why does the IRS require direct debit for some installment agreements?

Direct debit isn’t always required, but the IRS often favors it, and it typically comes with a lower setup fee than a mailed check agreement under IRM 5.14 guidance. It also lowers the odds of an accidental default, since the payment is automatic rather than dependent on someone remembering to mail it by the due date each month.

What happens if a payment on an installment agreement is missed?

A missed or returned payment can put the agreement into default, which reopens the door to IRS collection action, including liens or levies. If a taxpayer knows a payment is going to be short or late, the better move is to contact the IRS or their representative before the due date rather than after, since the IRS has more flexibility to work with a taxpayer who communicates early.

Does approval of an installment agreement mean the tax debt goes away?

No. The debt is still owed, along with any penalties and interest that continue to accrue during the agreement, and it gets paid down over time through the monthly payments. What changes is the collection posture. The IRS is no longer trying to collect everything immediately, and as long as the taxpayer stays current, enforced collection stays paused.